Markets extend early gains; Nifty nears 8500 mark

Indian equity markets have extended gains on sustained buying by domestic investors and foreign inflows. Banking shares were witnessing good buying interest in afternoon seesion. Sentiment got boost with the IMD report that rains are likely to cover entire India in next 48 hours. The monsoon has yet to cover parts of Rajasthan and Gujarat and rains will be 107 percent of long period average in July. Markets also got some support with global ratings agency Crisil’s report that India’s economy will grow at 7.9 percent in the current financial year compared with 7.6 percent in fiscal 2016.However, Investor  remained cautious ahead of IIP and inflation data to be released later in the day.

On global front, Asian stocks climbed for a second day, as a tumbling yen sent Japanese equities higher after US shares rallied to an all-time high. Back home, on sectoral front, metal, oil & gas, and realty rallied. In scrip specific development , shares of engineering firm Greaves Cotton jumped as much as 5 per cent to hit intraday high of Rs 145 after the company announced foray into multi-brand spare parts business.

The BSE Sensex is currently trading at 27727.46, up by 100.77 points or 0.36%, after trading in a range of 27667.81 and 27760.81. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.51%, while Small cap index was higher by 0.10%.

The top gaining sectoral indices on the BSE were Metal up by 1.56%, Oil & Gas up by 1.06%, Bankex up by 0.90%, Realty up by 0.83%, Consumer Durables up by 0.76% while, Capital Goods down by 0.26%, FMCG down by 0.12%, IT down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.66%, Maruti Suzuki up by 2.22%, Tata Steel up by 2.11%, Axis Bank up by 1.75% and ONGC up by 1.67%. On the flip side, Coal India down by 1.09%, Hindustan Unilever down by 1.03%, Cipla down by 0.93%, Asian Paints down by 0.64% and Sun Pharma Inds. down by 0.58% were the top losers.

Meanwhile, after the Cabinet last month approved spectrum auction rules except spectrum usage charges (SUC) recommended by the inter-ministerial panel Telecom Commission, the Telecom Regulatory Authority of India (Trai) is likely to give its view on annual SUC to the Department of Telecommunications (DoT) this week. The SUC has been highly debatable issues within the industry, where Trai had recommended SUC at a uniform rate of 3 per cent across the industry and gradually bringing it down to 1 per cent of revenues from telecom services.

Before 2010, there was only 2G spectrum and hence the calculation of revenue was easy. But the process became complex after new frequencies were allocated to companies for services like 3G and 4G. The government, in January 2014, decided to cap SUC at a flat 5 per cent for spectrum that was to be procured in the future auctions. At that point, telecom operators were asked to pay the weighted average of their existing SUC (on the old rate of 3-8 per cent) based on the quantum of spectrum they hold and five per cent if they acquire new spectrum.

The Finance Minister Arun Jaitley had said that the Telecom Commission took the opinion of Attorney General on SUC after recommendation of Trai was received and hence before taking a final call there was need to consult the regulator again. The Telecom Commission had recommended that government should levy 3 per cent SUC on airwaves that will be allocated to companies following the auction.

Spectrum auction was earlier planned by DoT in July, in which airwaves worth Rs 5.66 lakh crore will be put on the block, but with the Cabinet asking for Trai’s view on SUC; it deferred the sale, till September.

The CNX Nifty is currently trading at 8495.25, up by 27.35 points or 0.32% after trading in a range of 8479.20 and 8503.45. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.92%, ICICI Bank up by 2.70%, Tata Steel up by 2.19%, Maruti Suzuki up by 2.09% and Grasim Industries up by 1.88%. On the flip side, BHEL down by 1.54%, Coal India down by 1.32%, Aurobindo Pharma down by 1.24%, Tata Power down by 1.22% and Hindustan Unilever down by 1.16% were the top losers.

The Asian markets were trading mostly in green,KOSPI Index increased 2.69 points or 0.14% to 1,991.23, Jakarta Composite surged 38.53 points or 0.76% to 5,107.55, Shanghai Composite climed 47.21 points or 1.58% to 3,042.12, Taiwan Weighted jumped 54.99 points or 0.63% to 8,841.46, Hang Seng was higher by 229.47 points or 1.1% to 21,109.97, Nikkei 225 increased 386.83 points or 2.46% to 16,095.65 On other hand, FTSE Bursa Malaysia KLCI decreased 4.69 points or 0.28% to 1,649.18